Health care debt and fair billing.
Existing law requires a hospital to maintain an understandable written policy regarding discount payments for financially qualified patients and an understandable written charity care policy. Existing law requires that uninsured patients or patients with high medical costs who are at or below 350% of the federal poverty level be eligible for charity care or discount payments from a hospital. Existing law defines “high medical costs” to mean, among other things, annual out-of-pocket costs at the hospital that exceed 10% of the patient’s family income in the prior 12 months. Existing law authorizes a hospital to grant eligibility for charity care or discount payments to patients with incomes over 350% of the federal poverty level. Existing law requires a hospital to provide the Department of Health Care Access and Information with a copy of its discount payment policy and charity care policy, and requires the department to make the information public. Existing law requires a hospital to post notice of its policy for financially qualified and self-pay patients in designated locations that are visible to the public.
This bill would instead require that uninsured patients or patients with high medical costs who are at or below 400% of the federal poverty level be eligible for charity care or discount payments from a hospital, and would authorize a hospital to grant eligibility for charity care or discount payments to patients with incomes over 400% of the federal poverty level. The bill would redefine “high medical costs” to include annual out-of-pocket costs at the hospital that exceed the lesser of 10% of the patient’s current family income or family income in the prior 12 months. The bill would require a hospital to prominently display a notice of the hospital’s policy for financially qualified and self-pay patients on the hospital’s internet website with a link to the policy itself. The bill would also make related technical changes.
Existing law requires a hospital to have a written policy about the advancing of patient debt to collection. Existing law requires the hospital, its assignee, or other owner of the patient debt to provide a patient with a clear and conspicuous notice with specified information about the debt before beginning collection activities against a patient, and prohibits a collection action before 150 days after the initial billing if the patient lacks coverage or may have high medical costs. Existing law requires a hospital to reimburse a patient for overpayments in excess of the amount due, including interest, and to give a patient a credit for the amount due at least 60 days from the date the amount is due.
Existing law, the Rosenthal Fair Debt Collection Practices Act, prohibits debt collectors from engaging in unfair or deceptive acts or practices in the collection of consumer debts and to require debtors to act fairly in entering into and honoring those debts. A debt collector who violates the act is liable for specified damages and penalties to be paid to the debtor. Existing law prohibits a debt buyer from making a written statement to a debtor in an attempt to collect a consumer debt unless the debt buyer possesses specified information, including the date of default or the date of the last payment, and requires the debt buyer to include specified information in the written statement to the debtor. Existing law defines “debt buyer” to mean a person or entity that is regularly engaged in the business of purchasing charged-off consumer debt for collection purposes, whether it collects the debt itself, hires a third party for collection, or hires an attorney at law for collection litigation.
This bill would prohibit a hospital from selling patient debt to a debt buyer, unless specified conditions are met, including that the hospital has found the patient ineligible for financial assistance or the patient has not responded to attempts to bill or offer financial assistance for 180 days. The bill would require a hospital to send a patient a notice with specified information, including an application for the hospital’s charity care and financial assistance, before assigning a bill to collections, or selling patient debt to a debt buyer. The bill would prohibit a debt collector or debt buyer from collecting consumer debt that originated with a hospital without including in the first written communication to the debtor specified information, including a copy of the above-described notice sent by the hospital. The bill would prohibit debt collection before 180 days after the initial billing, regardless of the patient’s financial status. The bill would require a hospital to provide the Department of Health Care Access and Information with a copy of its debt collection policy. The bill would require the department to review a hospital’s policy for compliance with the law by January 1, 2023, and whenever a significant change is made and submitted to the department, and make this policy, as well as the hospital’s discount payment policy and charity care policy, available on the department’s internet website. The bill would require the department, commencing on January 1, 2024, to impose an administrative penalty against a hospital that improperly bills a patient, as specified, and to establish an appeals process by regulation. The bill would require a complaint in an action brought by a debt collector for a general acute care hospital debt to allege specified facts and to be accompanied by copies of the application for, and notice from the hospital regarding, financial assistance. The bill would require a hospital to refund a patient any overpayments within 30 days.
Existing law requires a hospital to comply with the above provisions as a condition of licensure.
This bill would delete the provision making compliance a condition of licensure.
This bill would incorporate additional changes to Section 127410 of the Health and Safety Code proposed by AB 532 to be operative only if this bill and AB 532 are enacted and this bill is enacted last.